Efforts to prompt businesses to hire new workers have varied this year, but one incentive which some employers have been using to their advantage is the HIRE tax credit, which essentially has given more employers benefits if they hire workers who have previously been unemployed. While it’s no secret that unemployment has been a major problem over the past months, and the job market continues to be unwelcoming for the vast numbers of men and women looking for a job, some employers may be unaware of this tax credit and there are only a few weeks left during which qualified employers may be able to benefit from adding additional members to their workforce.
According to the IRS website, workers who were previously unemployed and are hired by businesses can qualify an employer for, what essentially works out to be, an exemption from their share of Social Security on taxes paid on these individuals and may qualify for these companies for a general tax credit of up to $1000 per worker when they are retained for a year or more.
The cutoff date for this tax credit is the end of 2010, as workers hired before January 1, 2011 but after February 3, 2010 are those who will qualify their employer for this credit. While, again, there have been some employers who have taken advantage of this potential tax credit, employers are still being prompted to make hires as, again, a general tax credit may be offered if they keep these workers for a specific period of time.
However, businesses have been slow to hire new workers as many either remain unsure about the future of their industry and feel they are not in a position where they need new workers, while others have simply been able to remain profitable even with a reduced workforce. There are also companies who have argued that small business loans have been inaccessible, which has been a major hindrance when it comes to business growth and hiring new workers, but banks have stated that the demand for small business loans has been low.
Yet, while there are reports that some financial institutions are beginning to open up their lending practices, this HIRE tax credit is still available for employers who may be hesitating to add new workers at the end of the year. While there are retailers and other companies who are bringing in additional employees for the holiday season, again, only workers who have been previously unemployed and are kept for a year will benefit an employer through this credit.